What the gold spot price really means

The spot price is the current price for one troy ounce of wholesale gold for near-immediate settlement. It is derived largely from activity in the most-traded futures contracts and the over-the-counter London market.

Retail buyers almost never pay spot. Coins and bars carry a premium that covers fabrication, distribution, dealer costs and demand for a specific product.

When you sell, dealers typically quote a bid below spot or near it, depending on the product. The difference between what you pay and what you receive is the real cost of owning physical gold.

Comparing premiums across reputable dealers, rather than watching spot alone, is the most practical way to protect your purchase.